Virus-infected and immune competent mononuclear phagocytes (MP; perivascular macrophages and microglia) drive the neuropathogenesis of human immunodeficiency virus type one (HIV-1) infection. Modulation of the MP phenotype from neurodestructive to neuroprotective underlies adjunctive therapeutic strategies for human disease. We reasoned that, as Copolymer-1 (Cop-1) can induce neuroprotective activities in a number of neuroinflammatory and neurodegenerative disorders, it could directly modulate HIV-1 infected MP neurotoxic activities. We now demonstrate that, in laboratory assays, Cop-1-stimulated virus-infected human monocyte-derived macrophages protect against neuronal injury and elicit anti-retroviral activities. Severe combined immune deficient (SCID) mice were stereotactically injected with HIV-1 infected human monocyte-derived macrophages, into the basal ganglia, to induce HIV-1 encephalitis (HIVE). Cop-1 was administered subcutaneously for 7 days. In HIVE mice Cop-1 treatment led to anti-inflammatory and neuroprotective responses. Reduced micro- and astro- gliosis, and conserved NeuN/MAP-2 levels were observed in virus affected brain regions in Cop-1-treated mice. These were linked to interleukin-10 and brain-derived neurotrophic factor expression and downregulation of inducible nitric oxide synthase. The data, taken together, demonstrate that Cop-1 can modulate innate immunity and, as such, improve disease outcomes in an animal model of HIVE.